Supermarket giant Sainsbury's held possible merger talks with rival Morrisons earlier this year, it is claimed. The two grocers reportedly held exploratory discussions some months ago about a major deal.
Sainsbury's is the UK's second biggest supermarket, behind Tesco, and has grown in strength under boss Simon Roberts. Morrisons, on the other hand, has struggled since a private equity takeover and has dropped to become only the country's fifth largest grocer. Combining the two would have given the firm a 23.6% market share, though still behind Tesco.
Talks between November and February
It is claimed the two sides were in contact between November 2025 and February this year, but that Sainsbury's walked away. No active discussions are believed to be taking place now.
Supporters would have likely argued their merged buying power and know-how would have meant lower prices and a wider choice for shoppers. However, it would inevitably have led to concerns about the impact on their combined army of workers, and stores. Sainsbury's, in particular, would likely be ordered to sell branches to satisfy regulators' concerns around competition.
Consolidation wave expected
Another wave of supermarket industry consolidation is seen as inevitable in the next few years. According to Sky News, Morrisons' owner, the private equity firm Clayton Dubilier & Rice, remains open to a tie-up with one of the chain's major competitors.
Asda, which is also owned by private equity investors, could be involved in future dealmaking. Like Morrisons, Asda has struggled in the face of stiff competition from both Tesco and Sainsbury's on one side and then from discount rivals Aldi and Lidl.
The latest reports came six years after a failed merger between Sainsbury's and Asda. The proposed mega-deal was thwarted on competition grounds.
